The FSC submitted a roadmap to allow local spot crypto ETFs in the second half of 2025.
A regulatory framework for Korean won-based stablecoins is also planned for late 2025.
Institutional crypto trading access is expanding as South Korea moves to modernize its financial system.
The financial authority of South Korea recently turned over a roadmap to launch local spot cryptocurrency exchange-traded funds (ETFs) and stablecoins pegged to the Korean won. The initiative will go into the implementation phase later on in the year 2025.
This is a change from the previous constraints as per the recent policy trends of the administration of Lee Jae Myung, the president. To add on this, in early May, the president-elect promised a push toward the ETF in South Korea via a Facebook post, boosting the country's stance on healthy crypto policies
Crypto ETF Ban Nears Reversal Under New Government Plans
The Financial Services Commission (FSC) submitted its proposal to the Presidential Committee on Policy Planning, according to local news reports. The plan outlines preparations for enabling domestic spot crypto ETFs.
This marks a significant policy shift from the FSC’s prior stance, which prohibited both the issuance and trading of crypto ETFs in the country. The FSC had cited concerns about financial instability and classified cryptocurrencies as unfit for underlying assets in such financial products.
The regulatory roadmap follows President Lee’s election platform, which included pledges to lift the ban on crypto ETFs. His campaign emphasized expanding financial tools for younger generations. The FSC’s submission is seen as a foundational step toward meeting those goals.
Won-Based Stablecoin Framework Expected in Late 2025
In addition to ETF plans, the FSC roadmap includes a framework for introducing stablecoins backed by the Korean won. The proposed timeline for this initiative also targets the second half of 2025.
President Lee has previously addressed the need for domestic stablecoins to keep capital within South Korea. He expressed this view during a policy discussion last month, saying that a won-based stablecoin market would reduce financial outflows and strengthen national liquidity.
While Thursday’s reports outlined the FSC’s proposals in detail, the commission later issued a public statement on Friday. It clarified that the documents submitted to the policy committee are not yet finalized or confirmed.
Institutional Access Expands as Traditional Market Rules Evolve
Although spot ETFs remain restricted, the FSC continues to open the financial system to crypto-related products gradually. It is currently processing phased approvals for institutional investors to commit in digital asset trading. These approvals are part of a broader shift toward incorporating blockchain-based assets within traditional finance.
Separately, the FSC is reviewing a probable extension of trading hours at Korea Exchange. The proposed extension would increase operating hours from 6.5 hours to 12 hours per day. This review is part of wider efforts to modernize South Korea’s financial markets. Data from the FSC shows that by the end of last year, South Koreans held approximately $75.7 billion worth of digital assets.